LAW 2104: LAW RELATING TO SALE OF GOODS SEPTEMBER 2024

CHAPTER III

PERFORMANCE OF THE CONTRACT

Introduction
In a contract for sale both the buyers and the sellers have their respective parts to
perform. After the formation of a valid contract of sale, the next stage is its performance.
The performance of a contract of sale may be defined as the performance of the respective
duties of the seller and buyer as per the terms of the contract.
It is the duty of the seller to deliver the goods and the buyer to accept and pay for
them, in accordance with the terms of the contract of sale.1
Unless otherwise agreed, delivery of the goods and payment of the price are
concurrent conditions, that is to say, the seller shall be ready and willing to give possession
of the goods to the buyer in exchange for the price, and the buyer shall be ready and willing
to pay the price in exchange for possession of the goods.2

3.1. Duties of Seller

It is the duty of the seller to deliver the goods in accordance with the terms of the
contract of sale. The ordinary rule is that the seller should be ready and willing to deliver
on receiving the price, and the buyer shall be ready and willing to pay the price in exchange
for delivery. This rule however may be varied by agreement between the parties.

3.1.1 Delivery
Delivery of goods sold may be made by doing anything which the parties agree shall
be treated as delivery or which has the effect of putting the goods in the possession of the
buyer or of any person authorized to hold them on his behalf. 3
The seller can discharge his obligation in regard to deliver by doing an act which
according to the contract will be deemed to constitute delivery or which puts the goods in
the possession of the buyer or his agent.

1
Section 31 of the Sale of Goods Act
2
Section 32 of the Sale of Goods Act
3
Section 33 of the Sale of Goods Act
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 LAW 2104: LAW RELATING TO SALE OF GOODS SEPTEMBER 2024

The delivery may be actual or constructive. It is actual when the goods themselves
are delivered to the buyer or the key of a warehouse containing the goods is handed over to
him. It is constructive as where before sale the goods are in the possession of a
warehouseman as bailee for the seller, and after sale he agrees to hold them as bailee for the
buyer.

3.1.2 Effect of Part Delivery

A delivery of part of goods, in progress of the delivery of the whole has the same
effect, for the purpose of passing the property in such goods, as a delivery of the whole; but
a delivery of part of the goods, with an intention of severing it from the whole, does not
operate as a delivery of the remainder.4
Delivery of part of the goods is sufficient to pass the property in goods to the buyer
unless the seller intends to sever the part delivered from the whole.
e.g. 'A' sells 50 bags of rice to 'B'. The rice remains in A's warehouse. After the sales,
B sells to 'C' 10 bags of rice, and 'A', effect of a delivery of the whole.
Apart from any express contract, the seller of goods is not bound to deliver them until
the buyer applies for the delivery.5

3.1.3. Rules Relating to the Delivery of Goods.

Whether the buyer should take possession of the goods or the seller should send them
to the buyer is a question which would depend in each case on the contract (express or
implied) between the parties. Apart from any such contract, goods sold are to be delivered
at the place at which they are at the time of sale. Goods agreed to be sold are to be delivered
at the place at which they are at the time of the agreement to sell. If goods are not in existence
at the time of contract, delivery is to be taken at the place at which they are manufactured
or produced.
Under the terms of contract, the seller is bound to send the goods to the buyer, he
must deliver the goods within reasonable time.

4
Section 34 of the Sale of Goods Act.
5
Section 35 of the Sale of Goods Act.
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 LAW 2104: LAW RELATING TO SALE OF GOODS SEPTEMBER 2024

In cases where the goods sold are in the possession of a third party there is no delivery
unless the person holding the goods informal the buyer that he holds the goods on his
account. But nothing shall affect the operation of the issue or transfer of any document of
title to goods.
The buyer has to demand for delivery and the seller has to tender the same at a
reasonable hour. When the buyer applies for delivery, the time within which the seller is to
comply with the demand depends upon the circumstances of the contract. The cost of
delivery is to be borne by the seller in the absence of a contract to the contrary.
The seller is bound to deliver the exact quantity of goods sole; again the goods sold
must be of the same description as is given in the contract. If the seller deliver wrong
quantity of goods the buyer may reject the whole. Such rejection must be within reasonable
time. If he accepts the whole, he must pay the price thereof at the contract rate. He may also
accept the part contracted for or reject the part that has been wrongly delivered. 6

3.1.4 Delivery of Wrong Quality

The seller is bound to deliver the exact quantity of goods sole; again the goods sold
must be of the same description as is given in the contract. If the seller deliver wrong
quantity of goods the buyer may reject the whole. Such rejection must be within reasonable
time. If he accepts the whole, he must pay the price thereof at the contract rate. He may also
accept the part contracted for or reject the part that has been wrongly delivered.7

e.g. (1) 'A' agrees to sell and deliver 'B' 500 bags of rice, but only 420 bags are
delivered. 'B' accepts the quantity sent. 'B' cannot afterwards object that the
whole of the 500 bags was not delivered. B' must pay for the 420 bags at the
contract rate.
(2) 'A' orders to 'B' 100 bottles of wine. 'B' sends 75 bottles. 'A' is entitled
to reject the whole or accept the bottles sent and reject the rest. If he accept
the bottles sent, he must pay for them at the contract rate.

6
Section 36(1,2,3,4,5,) of the Sale of Goods Act.
7
Section 37 of the Sale of Goods Act.
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(3) 'A' orders to 'B' specific articles of china. 'B' sends these articles with
other articles of china which had not been ordered. 'A' may refuse to accept
any of the goods sent.
The buyer may insist on delivery of the entire quantity at a time and is not bound to
accept delivery thereof by installments.
When delivery is under the terms of a contract to be made by installment, the failure
on the part of the buyer to pay for any one delivery will not entitle the seller to repudiate the
contract particularly contract goods are deliverable by installments, the general rule is that
a breach by one partly in connection with one installment does not of itself entitle the other
party to rescind the contract as to the other installments. But if the breach is of such a kind
or takes place in such circumstances as reasonably lead to the inference that similar breaches
will be committed in relation to subsequent deliveries the whole contract may be regarded
as repudiated and may be rescinded.8
The delivery of goods by a seller to a carrier for their being transmitted to the buyer
or delivered to a wharfinger for their safe custody is prima facie deemed to be a delivery of
the goods to the buyer.
The delivery of goods to a wharfinger for safe custody is sufficient delivery of the
goods. The seller also shall make reasonable contract with the carrier or wharfinger so that
the goods may not be lost or damaged. If the seller has done this, he is not responsible for
any loss or damage during transit.
In case of sea-transit the seller has to inform the buyer as to the necessity of insuring.
If he neglects to inform the buyer, the goods shall be deemed to be at his risk during sea –
transit.9
When goods which the seller undertakes to deliver at a distant place at his own risk
deteriorate during transit and such deteriorate during transit and such deterioration is
necessarily incidental to the course of transit, the buyer is to suffer such loss.10

8
Section 38(1, 2) of the Sale of Goods Act.
9
Section 39(1,2,3 ) of the Sale of Goods Act.
10
Section 40 of the Sale of Goods Act.
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3.2. Duties of the Buyer

3.2.1 Buyer’s Right of Examining the Goods
Where goods are delivered to the buyer which he has not previously examined, he is
not deemed to have accepted them unless and until he has had a reasonable opportunity of
examining them for the purpose of ascertaining whether they are in conformity with the
contract.
Unless otherwise agreed, when the seller tenders delivery of goods to the buyer, he
is bound, on request, to afford the buyer a reasonable opportunity of examining the goods
for the purpose of ascertaining whether they are in conformity with the contract.11

3.2.2 Buyer’s Duty to Accept the Goods and Pay the Price
The buyer is deemed to have accepted the goods when he intimates to the seller that
he has accepted them, or when the goods have been delivered to him and he does any act in
relation to them which is inconsistent with the ownership of the seller, or when, after the
lapse of a reasonable time, he retains the goods without intimating to the seller that he has
rejected them.12

3.2.3 Buyer not Bound to Return Rejected Goods.

Unless otherwise agreed, where goods are delivered to the buyer and the refuses to
accept them, having the right so to do, he is not bound to return them to the seller, but it is
sufficient if he intimates to the seller that he refuses to accept them.13

3.2.4 Liability of Buyer for Refusing Delivery of Goods

When the seller is ready and willing to deliver the goods and requests the buyer to
take delivery, and the buyer does not within a reasonable time after such request take
delivery of the goods, he is liable to the seller for any loss occasioned by his neglect or
refusal to take delivery, and also for a reasonable charge for the care and custody of the
goods:

11
Section 41(1)(2) of the Sale of Goods Act.
12
Section 42 of the Sale of Goods Act.
13
Section 43 of the Sale of Goods Act.
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 LAW 2104: LAW RELATING TO SALE OF GOODS SEPTEMBER 2024

Provided that nothing in this section shall affect the rights of the seller where the
neglect or refusal of the buyer to take delivery amounts to a repudiation of the contract.14

KEY TERMS

performance

rights

duties

delivery

accept

quality

14
Section 44 of the Sale of Goods Act.